Pizza Rut

With restaurant pizza sales as flat as a thin-crust pie, the nation's leading chains are preparing new products and value propositions to get the dough rising. Two of them are seeking growth from products that aren't pizzas at all.

Dollar volume for quick-service pizza was down 1% through November of last year vs. the comparable period in 2000, according to researcher NPDFoodworld CREST. Pressured by the frozen pizzas-a hot category in supermarkets, with growth of 6% to 7%-and independent pizza shops, estimated to finish 2001 up 3.7%, major chains are feeling the heat.

Tricon Global Restaurants' Pizza Hut is seeking a second agency, Papa John's is in review, Domino's recently upended its creative strategy and Little Caesar's has abandoned national advertising in favor of local marketing.

Randy Gier, chief marketing officer for Pizza Hut, said this is the third-biggest launch for the company, behind its Big New Yorker and Stuffed Crust introductions. "Pizza is the No. 1 favorite food by far, but it's not the No. 1 seller in America," he said-it's still behind hamburgers. "We've been on a mission that if pizza is the favorite food, it should be the No. 1-sold food."

What's been driving sales in the highly saturated pizza business, said Bob Goldin, exec VP with restaurant consultancy Technomic, is new toppings, crusts, shapes and sizes. But "when all else fails, [marketers] go back to discounting," he said.

Pizza Hut is no exception. "When the economy gets tight, money gets tight and purse factor gets real big," said Pizza Hut's Mr. Gier. Indeed, part of what drove the chain's improved same-store sales in December-up 3% over December 2000-was its Ultimate Pizza Lover's Line, promoted at $8.99 for a medium pie. Over the holiday season, Pizza Hut offered a 99› medium pie with a specialty pizza order for what one industry marketer called the "most aggressive discounting" seen in the category.

FLAT SALES FOR PAPA JOHN'S

Little has helped No. 3 Papa John's International. Once the category darling, the chain reported flat sales for 2001, reduced advertising spending and saw fewer consumer visits. Same-store sales at Papa John's fell 3.9% in October, 5.4% for November and 0.4% for December vs. the comparable periods in 2000. In mid-2001, the chain parted ways with agency Fricks/Firestone, Atlanta, and has since launched a review for its ad account once valued at $40 million to $50 million.

Sales at value-oriented No. 2 Domino's Pizza and No. 4 Little Caesar Enterprises' Little Caesar's chain have risen. Domino's performance also can be partly attributed to non-pizza offerings. "We know consumers have responded very favorably to us providing more than a pizza, more like a meal, with side items like our CinnaStix, Cheesy Bread and chicken wings," said Ken Calwell, exec VP-build the brand for Domino's .

He said the chain is making a better connection with consumers via advertising. In 2001, the chain ditched its Bad Andy spokespuppet for the "Get the Door. It's Domino's" effort from Interpublic Group of Cos.' Deutsch, New York.

stable, stable

After a dismal 2000 that included closing 300 units, Little Caesar Enterprises stabilized in 2001. "We continue to see double-digit growth for the year," said Stuart DeGeus, VP-field marketing. The company posted fourth-quarter sales growth of 10.2% at stores open at least a year. He attributed the recovery to a refocus on product, franchisee unity and value. "We made a number of product enhancements and have been aggressive in marketing and advertising at the local level," Mr. DeGeus said. The chain spent $2.5 million in measured media from January through October 2001-one-fifth Little Caesar's media spending as recently as 1999.

It's been more than a year since Interpublic's Foote, Cone & Belding Worldwide, Southfield, Mich., resigned the account and Little Caesar's shifted its national TV budget to field promotions using local production houses. "The money is still being invested in the local marketplace," said Mr. DeGeus.